The topography of the state

This section seeks to dissect the anatomy of the state in order to demon­strate the vast range of hybrid and para-statal organizations that currently exist at the national level.

Providing a map, or at least a sketch, of the topography of the contempo­rary state facilitates understanding in relation to ideas about degrees of autonomy. It is clear that some forms of delegated governance are designed and intended to have more autonomy than other forms. Hived-in agencies (meaning they are still formally part of their parent department) are intended to have less autonomy than hived-out bodies. While it is possible to map out this spectrum of autonomy it is much harder to ascertain why certain functions have been designated to certain organizational forms. It is equally difficult to understand why certain tasks are viewed by politicians and officials as suitable for delegation whereas other apparently similar tasks are not. Another challenge relates to appreciating the difference between theoretical and actual organizational autonomy.

Clearly the degree of flexibility enjoyed by politicians in terms of delegating state functions to quasi-autonomous bodies or 3Ps also varies from country to country and is conditioned by a blend of constitutional, legal, cultural and historical factors. Taken together these factors create a path-dependency that may either facilitate or frustrate the process of delegating tasks to new tools or forms of governance. The freedom of members of the executive in the US and The Netherlands is restricted to some extent by the constitutional powers granted to their respective legislatures in relation to creating, merging or abol­ishing delegated public bodies. In the UK, by contrast, members of the executive enjoy great flexibility in relation to the structure of the state. However the impact of country-specific limitations on delegation and varying national pathways towards the increased use of 3Ps has to some extent been ameliorated by a broader shift in governing mentality; a shift that has gener­ally accepted the logic of delegation and led to a general trend towards what Pollitt and Talbot (2004) refer to as ‘unbundling’ government.

The structure of the modern state at the national level can be viewed as a series of concentric circles or ripples on a pond with departments of state at the centre and a number of organizational forms, each enjoying a greater degree of autonomy as they radiate out from the centre. Figure 12.1 provides an overview of the structure of the British state at the national level as of March 2005 by way of example.

Figure 12.1 Delegated governance and PPPs: an overview

The most striking feature of this figure is the simple variety of organizations that exist beyond the twenty or so ministerial departments of state.

Figure 12.1 also includes two organizational forms that are distinct and separate from the spectrum of autonomy. Independent statutory bodies generally cover professional regulatory bodies (such as the General Medical Council and Law Society). These bodies have certain regulatory roles and are usually founded in statute but they receive no public monies and are viewed as being completely distinct from the governmental framework. However, this does not prevent a government from considering amending the founding legislation where professional self-regulation is viewed as being problematic. The second disconnected organizational form on Figure 12.1 refers to independent parliamentary bodies, for example the Electoral Commission and the Church Commissioners, that are formally inde­pendent of political influence but are funded by and directly accountable to Parliament rather than to a government department.

The UK is by no means unique in having such a disaggregated adminis­trative landscape (see Modeen and Rosas 1988). Canada, the United States, France, Germany, The Netherlands, New Zealand, Spain, Sweden and Australia, to mention but a few, have similarly complex delegated state struc­tures (see Table 12.1).

Analysing the existence and evolution of delegated governance within various state structures not only point to country specific variations in form and extent but also a number of evolutionary similarities or areas of convergence. First, since the mid-1980s wave after wave of reform has attempted to delegate as many functions as possible along the spectrum of autonomy from the centre outwards. Consequently the role of central departments has changed from administering public policy to co-ordinating the web of organizations, each of which enjoy different degrees of autonomy, to which implementation has now been delegated.

A second evolutionary pattern borne out through comparative research is that the process of delegating roles and responsibilities to para-statal bodies or P3s has not been undertaken in a systematic or logical manner

Table 12.1 A comparative review: examples of delegated or ‘para-statal’ bodies

(see OECD 2002).

A third general area of convergence would appear to be a trend away from delegating tasks to quasi-autonomous public bodies towards estab­lishing P3s with the private sector, such as the private finance initiative in the UK or the privately financed projects in Australia. In some countries, such as the UK, this process has been stimulated by the fact that there are very few areas of state responsibility that have not already been delegated. However, there is a wider shift towards utilizing P3s as an innovative way to deliver certain services in partnership with but not directly by the state. Thereby constructing a ‘middle-way’ state system somewhere between corporatist models of traditional social democrats and the minimal state pro-privatization ideal of neo-liberals. This delegation of responsibilities to bodies or partnerships on the fringe of the state is not necessarily aimed at achieving a smaller state or reducing public services but it is an explicit recognition that the modern state may not be the best manager of public services and that other structures may deliver improved levels of service. It is also linked to the issue of capacity as governments are increasingly seeking to buy in capacity from the private sector to complement or improve that offered by traditional state structures.

This shift in statecraft has been nurtured and promoted by major inter­national financial institutions, including the World Bank, International Monetary Fund and the European Bank for Reconstruction and Develop­ment (Jones 1999).

A fourth trend indicates a common pattern of 3P development. State systems commonly begin by experimenting with construction or low-salience partnerships (road building, waste collection, etc.) which then begins an incremental process through which further areas of state activity are gradu­ally opened up to 3Ps (care for the elderly, education provision, clinical medicine, welfare-to-work programmes, prison management, etc.). Cross­comparative research also reveals that a common underlying reason for delegating function to the boundaries of the state - constraints on spending resources combined with a public reluctance to pay higher taxes. In this context the efficiency gains suggested (but rarely delivered) by either delegating functions to independent public bodies or entering into 3Ps become attractive.

A final trend to be found across the world relates to organizational drift. It is common for functions to ‘drift’ along this spectrum of autonomy from the centre to the periphery and relatively rare, but not unknown, for a func­tion to be drawn back in towards the department. The Forensic Science Service (FSS) in the UK is a good example of organizational ‘drift’. It used to be part of a central department (the Home Office) until it became an executive agency in 1991, a trading fund in 1999, and in 2005 the govern­ment announced its intention to establish the FSS as a government-owned company as a step towards establishing the service as a 3P at some point in the future. Not only do organizations evolve and frequently ‘drift’ but certain organizational forms of delegated governance frequently spawn sub-species which themselves enjoy further autonomy. The creation of 3Ps, for example, will frequently lead to the creation of a new independent body to oversee and regulate the relationship between the commissioning public sector authority and the private sector partner. For example, in the UK a new independent body called the Office of the Public Private Partnership Arbiter will determine disputes arising from the thirty-year 3Ps for the maintenance, renewal and upgrade of parts of the London underground tube train system. In the US 3Ps for highway construction or renewal commonly involve the creation of a semi-independent quasi-governmental entity, separate from local, state or federal government, with various degrees of increased responsibility for project development and finance (see Lockwood 1990). It is therefore possible to trace the development of a complex web of independent organizations, each of which enjoys an indi­rect relationship with elected politicians, each enjoying differing degrees of autonomy which further strain traditional forms of co-ordination and accountability. Appreciating the existence and impact of this multi-level aspect may add further weight to those proponents of the multi-level governance (MLG) approach as a more realistic and nuanced organizing perspective for the study of modern governing processes (for a discussion see Bache and Flinders 2004).

Indeed it is critical to appreciate that the boundaries of the state operate not only horizontally but also vertically in that delegated organizational forms exist at the sub-national, supra-national and global levels. For example, a number of arm’s-length agencies exist within the evolving architecture of what could be interpreted as a European state project (see Table 12.2).

Beyond the supra-national tier exist a number of independent global actors such as the World Bank, International Monetary Fund, International Atomic Energy Agency, International Council of Arbitration for Sport, World Anti-Doping Agency and the World Intellectual Property Organization. The delegation of tasks to quasi-autonomous actors at the supranational

Table 12.2 European quasi-autonomous agencies and independent financial institutions

and global level creates a clear link with recent research on the evolving structures and processes of MLG both within and between states. Organi­zations that operate on the boundaries of nation states must increasingly report to and operate within an external environment dictated to some extent by similarly independent organizations at the supranational level.

For example, European regulatory agencies in particular fulfil an increasingly important role in relation to global governance by providing a clear institu­tional locus through which to establish links with other supranational and global bodies. The European Medicines Agency (EMA) fulfils a dual-purpose role. Firstly, it fulfils a downward regulatory and co-ordinating role in relation to a network of 42 competent independent regulatory authorities at the national level (Medicines and Healthcare Products Regulatory Agency in the UK., National Institute for Medicine and Pharmacy in Portugal, Irish Medicines Board, etc.). Secondly, the EMA performs an upwards co-ordinating and harmonization role through its relationship with other supranational and global actors in this policy field (notably the Food and Drug Adminis­tration in the US and the World Health Organization). A similar network can be identified in the sphere of banking and finance where the European Central Bank and the European Investment Bank, operating through the European System of Central Banks, fulfil a similar two-way governance function; a downward co-ordinating and regulatory role in relation to national independent central banks and an upwards role in relation to global financial actors including the World Bank, International Monetary Fund and the OECD.

It is therefore possible to identify emergent structures of MLG that exist and operate at one-remove from governmental structures. The outcome of political and managerial reforms, particularly during the later decades of the twentieth century, has led to the creation of complex matrices in which functions have been redistributed both vertically and horizontally. Conse­quently, the reality of contemporary state structures is that they are highly fluid and heterogeneous networks consisting of a dense or ‘thick’ layer of organizations to which specific responsibilities have been delegated towards the outer fringes. As a result the boundaries of the state have become increas­ingly opaque, jurisdictional boundaries have become increasingly enmeshed and overlapping and the boundary between the public and private sectors is becoming increasingly blurred. Although these delegated public bodies and 3Ps play a central and largely positive role in modern governance their existence does create a number of challenges (both administrative and democratic). These challenges will be the topic of the next section.